Chinese slowdown sees borrowing retreat; US PPI stays very elevated; US budget deficit swells; US tech wobbles spread; Aussie house buyers on strike; UST 10yr at 5.15%; gold and oil hold; NZ$1 = 55.3 USc; TWI-5 = 59.4

Here's our summary of key economic events over the weekend that affect New Zealand, with news the world is watching the hot-mess mismanagement from the White House spill out into the general administration of their country.

But first locally this week it will be about October inflation signals and the RBNZ's half yearly Financial Stability review. We will also get updates to PPI data and trade activity too. And there will be a full dairy auction on Wednesday.

In Australia, the key data release will relate to their October jobs market where a bounce-back from the weak September result is anticipated.

In the US, Nvidia will release its Q3 earnings report. And Anthropic is expected to become a listed public company. There will be US data coming for retail sales, industrial production, and housing.

And there will be some major company earnings releases in China this week too, and their tech company results will be closely followed. Official data for house prices, industrial production, retail sales, fixed asset investment, and their labour market will drop this week as well. For Japan it will be Q3 GDP results, trade, inflation and machinery order data.

The Indonesian central bank is widely expected to increase its policy rate by +25 bps to 6% in an effort to address continued weakness in the rupiah, which has contributed to higher imported inflation.

But the big weekend economic news was from China. New yuan loans fell in October dropped -¥100 bln from September, a very rare event and only the second time it has happened since this data has been tracked. It is their first ever October contraction. The average expansion over the prior five years was +¥670 bln. It is confirmation of tepid domestic demand. Their tech industry raises its funds in either the bond market or by private placement. So without loan demand, banks are not incentivised to offer savers good rates. This will make many people grumpy and push them into risky options with high liquidity risk. Beijing will be nervous about what this says about their economy and their inability to get their 'dual circulation' economy functioning properly.

It is not without irony that Xi and Trump will meet this coming week in China to 'solve' some big public policy issues. The current management of their respective domestic economies doesn't show they have the skill. Unfortunately for the US, they will show up with two tech disasters clouding their reputation - Microsoft's global stumble, and the US air traffic control blunder. Neither give customers of US global tech much confidence they have things under control.

Meanwhile, American producer prices rose +6.5% in the year to October, about the pace expected and similar to the high +6.3% increase in September. Sanitising it to a 'core' rate still recorded a +4.9% rise and indicating that it has pressure on their inflation rate. It doesn't help that this is their fastest rate of increase, pandemic excepted, since 2011 when the modern data series began.

There were more Fed speakers out over the weekend warning that there is a need to raise US interest rates to combat persistent inflation. That includes from the boss of the San Francisco Fed, regulator Michelle Bowman, and the boss of the Boston Fed. Also, from the Vice-Chair of the Fed, Philip Jefferson.

Making matters worse, the disastrous management of the US federal budget just gets worse, and worse than analysts had expected. Their budget deficit widened to -US$404 bln in October from -US$284 bln a year earlier, missing forecasts of a -US$298 bln gap. That makes the deficit over the past year -US$2.1 tln and easily a record. Most other costs rose, but tax receipts fell, especially from companies and the wealthy. Neither Trump nor Bessent are competent to be running this. It's a hot mess that is unlikely to end well and the day of reckoning is coming faster than they realise.

In Australia, their housing market is slowing fast. The weekend auction clearance rates went even lower and are now down to pandemic levels. This is especially worrying in Brisbane. But of the other capital cities only Melbourne recorded a clearance rate above 50% (using their very generous, loose definitions). Buyers are on strike at current asking prices, deterred no doubt by high interest rates.

The UST 10yr yield has held from Saturday, still at 5.15% but up +30 bps from this time last week. The 30 year yield is at 5.48%, up +1 bp or +24 bps for the week. The key 2-10 yield curve is now at +28 bps (down -1 bp). Their 1-5 curve is at +37 bps (+2 bps) and the 3 mth-10yr curve is at +114 bps (up +2 bps). The China 10 year bond rate is up +1 bp at just on 1.60%, up +3 bps for the week. The Japanese 10 year bond yield is down -2 bps from Saturday at 2.86%, up +19 bps for the week. The Australian 10 year bond yield starts today at 5.13%, down -1 bp from Saturday, up +13 bps for the week. The NZ Government 10 year bond rate is now at 4.85%, unchanged from Saturday, up +6 bps for the week.

The price of gold is unchanged, still at just on US$3882/oz but down -US$277 for the week or a -6.7% retreat. Silver is now just on US$48.50/oz and down -50 USc from Saturday, down -5.8% for the week.

Oil prices have held today, to just on US$88.50/bbl in the US, while the international Brent price is still at just on US$95.50/bbl. Hormuz transits have stayed very low today with just four ships exiting over the past 24 hours, one tanker escorted (4 dark with transponders off) and five entering for new loads, no tankers (5 dark). The Red Sea activity is back to about 20 crossings each way at the Yemen chokepoint.

The Kiwi dollar has held over the weekend at just under 55.3 USc and its lowest since March 2009. Against all currencies, the US dollar is at a 19 month high on it's high & rising interest rate differential. Against the Aussie however we are also unchanged at 81.5 AUc. Against the euro we are still at just on 50.1 euro cents. That all means our TWI-5 starts today at just under 59.4 and still down at a 17 year low.

The bitcoin price starts today at US$64,607 and down -6.3% from this time Saturday. That puts it -13.5% lower than a week ago. Volatility over the past 24 hours has been high at +/-3.2%.

The easiest place to stay up with event risk is by following our Economic Calendar here ».